THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, CNN ANCHOR: We'd like to welcome back our international viewers. I'm John King, this is "State of the Union.

(BEGIN VIDEO CLIP)

KING (voice-over): Escalating violence in Iraq, and despite a relatively smooth presidential election, an assessment from the top U.S. general in Afghanistan, the situation there is deteriorating. We'll map out the challenges in both war zones, discuss calls for even more U.S. troops with the chairman of the joint chiefs, Admiral Michael Mullen and Karl Eikenberry, the U.S. ambassador to Afghanistan.

The president is off for a vineyard vacation, but not before making clear recent setbacks won't quiet his calls for major health care changes this year.

OBAMA: My obligation to the American people says we're going to get this done, one way or another.

KING: We'll assess the policy and political hurdles in the Senate with Republican Richard Lugar, independent Joe Lieberman, and Democrat Benjamin Cardin.

And he says the House should push the reset button health care reform. Democratic Congressman Emanuel Cleaver gets "The Last Word."

Then our "American Dispatch" from Fort Riley, Kansas, off to war again. The soldiers and families of the 1st Infantry Division take another turn in the Army cycle of family strain.

This is the STATE OF THE UNION report for Sunday, August 23rd.

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KING: In Afghanistan today, both President Hamid Karzai and his top challenger are claiming victory in last week's election, raising tensions even though it could be weeks or more before the official results are certified.

It is an uncertain military situation, as well, with fighting between U.S. forces and the Taliban intensifying, and fresh indications President Obama could soon be asked to commit more American troops. Here to talk about this and other global challenges is the chairman of Joint Chiefs of Staff, Admiral Mike Mullen; and the U.S. ambassador to Afghanistan, Karl Eikenberry. He joins us from Kabul.

And, Mr. Ambassador, let me start with you. There are complaints -- escalating complaints this Sunday about fraud in the elections. On the threshold question of will this balloting be credible, what is your answer?

EIKENBERRY: Well, right now, we're waiting for the results of this election to come in. The electoral -- the independent electoral commission, they're waiting for the tallies to be counted from across the country. There has been charges of fraud. The electoral complaints commission is taking those on right now.

We're really not going to know, John, for several more weeks exactly where we do stand in this process.

We're not sure exactly what the level of voter turnout was. Millions turned out to vote, but of course, Taliban intimidation, especially in southern Afghanistan, certainly limited those numbers. But for now, we don't know, and it's for us to wait and see and allow this process to move forward.

KING: Well, Admiral, jump in on that point. Wait and see, could be weeks, could be longer. It's already a very tenuous political situation, a dangerous military situation. How worried are you that if you have complaints of fraud, you have a candidate from the north, one challenger, the president who is from the south. Are you worried about ethnic tensions, ethnic violence escalating and complicating an already bad situation?

MULLEN: Well, this election was truly remarkable, and in terms of what Ambassador Eikenberry has laid out, in the face of what has been a growing insurgency, and certainly intimidation to a certain degree -- and we'll see over the next few weeks how it actually plays out.

Our forces under the leadership of our new commander out there, General Stan McChrystal, were very focused in support of the Afghan security forces. And one of the highlights for me is that the Afghan security forces, the police and the army, provided security for these elections. And over 95 percent of the polling stations were open.

And so, we'll keep that focus. And one of the possibilities, obviously, if there isn't a majority winner here, is a runoff. And so we'll keep that focus and be able to keep that focus.

KING: Well, you mentioned General McChrystal. He is preparing a report to the president, in which many, especially members of the congressional delegation that just met with him, believe he's going to ask for more troops.

Here's what Susan Collins said on her blog after meeting with both the ambassador and the general. She said: "Along with Ambassador Karl Eikenberry and their aides, the general provides us with a detailed briefing. He begins with his chilling assessment that the situation in Afghanistan is serious and deteriorating." She says, sir, she left that meeting with no doubt that he will ask for more troops. And there have been a number of options circulated. A low-risk 15,000 more; medium risk 25,000 more; high- risk 45,000 more.

Senator John McCain out this morning saying that he is worried that that has been made public, because he thinks there's political pressure, and that at best, then, you guys will split the difference and give 25,000 more troops. Pressure?

MULLEN: Well, I think it is serious and it is deteriorating, and I've said that over the last couple of years, that the Taliban insurgency has gotten better, more sophisticated. Their tactics, just in my recent visits out there and talking with our troops, certainly indicate that.

KING: But you have no doubt he'll ask for more troops?

MULLEN: No, I -- actually, we're not at a point yet where he has made any decisions about asking for additional troops. His guidance from me and from the secretary of defense was to go out, assess where you are, and then tell us what you need. And we'll get to that point.

And I -- I want to, I guess, assure you or reassure you that he hasn't asked for any additional troops up until this point in time.

KING: Mr. Ambassador, you're also a retired general, so you're a military man now in a diplomatic role. I want to read you something from Senator John Kerry, the chairman of the Foreign Relations Committee, in the context of rising doubts here in the United States about what is the mission in Afghanistan, not only in the Congress but with the American people.

Senator Kerry says: "I'm very concerned about Afghanistan's footprint. The breadth of the challenge that we face there, with police, with governance, corruption, narcotics, tribalism, other kinds of things may well be beyond the narrower definition the president gave the mission."

Do you believe, sir, that the American people understand what the mission is in Afghanistan?

EIKENBERRY: John, there are extraordinary challenges that we face in carrying out this mission, but we need to go back and remember Afghanistan and how it looked on the 10th of September of 2001.

And at that time, this was a state that was controlled by international terrorism. And so, the president's strategy, the administration's strategy is clear. It's to disrupt, dismantle, and eventually defeat al Qaeda.

KING: I just want to jump in, because there's a credibility question that many people ask. And it may not be fair to you in the challenge of Afghanistan, but because of what happened in Iraq, people in Congress and the American people, certainly in my travels, I was at Fort Riley this past week, they asked these questions. I want to go back in time. In 2006, you were on this network when you were still in the military and you were asked about the situation in Afghanistan in 2006, and you said this.

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EIKENBERRY: Things are getting better in Afghanistan in every dimension. If you look at it from the al Qaeda or the Taliban perspective, four-and-a-half years ago, you ruled in Afghanistan. Now you've been pushed out of Afghanistan.

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KING: And then a year later, sir, you were back on this network, 2006 turned into a not-so-good year, but you were back the very next February and you sounded optimistic again.

(BEGIN VIDEO CLIP)

EIKENBERRY: I think as we're now moving into 2007, we're very well-postured for success. We see a very significant increase in the combat power of the Afghan national army, the police. President Karzai continues to improve governance. So I think we're reasonably well-postured in 2007.

(END VIDEO CLIP)

KING: Is it not fair now in 2009, we are 18 days from the eighth anniversary of 9/11 -- you mentioned the situation on September 10th, is it not a fair question for the American people to say, where has all the money gone? And why has there not been more progress? And should they, I'm sorry, sir, believe optimistic statements from their government?

EIKENBERRY: Well, John, I don't think my statement right now would be characterized as optimistic. I'm being -- I'm giving a candid assessment that, as Admiral Mullen said, we have a very difficult situation in parts of Afghanistan today.

What we do have for the first time, I believe, since 2002, we have a very clear strategy, and matched against that we have sufficient -- we have resources that are being mobilized. That's in the security domain. That's in terms of very (ph) importantly on the civilian side here within the United States embassy, and our mission.

Admiral Mullen talked about the military dimension for Afghanistan. It's critical, but in and of itself, it's not sufficient. This is not going to be won entirely on the battlefield here for us in Afghanistan.

KING: I would like to ask the ambassador and the admiral to stand by. Much more with Admiral Mullen and Ambassador Eikenberry in just a moment. When we come back, we'll head to the magic wall for a closer look at these global challenges.

(COMMERCIAL BREAK) KING: We're back We're back with the chairman of the Joint Chiefs, Admiral Mike Mullen, and the U.S. ambassador to Afghanistan, Lieutenant General, retired, Karl Eikenberry.

Gentlemen, let's continue the conversation. Here are the three leading candidates in Afghanistan -- President Karzai, Dr. Abdullah and Mr. Ghani.

I want to move on to a major challenge, and you have a new strategy for dealing with this, Admiral. Help me understand. Look at this, the numbers are stunning. In 2001, Afghanistan produced 185 metric tons of opium. In 2008, look how much that has gone up, 7,700, from 12 percent of the world's poppy crop to 93 percent of the world's poppy crop.

Do you have a new counter-narcotic strategy that allows you to target drug kingpins if you believe they are supporting the Taliban and the insurgency? Is that correct?

MULLEN: Actually, yes, and we've had that for many months, and specifically changed our rules of engagement so that kingpins, laboratories, individuals who support, transport, specifically, these products are also able to be both either captured or killed. But we're just...

KING: How? How if there is a pro-U.S. government, how has that happened?

MULLEN: We're -- I just think it's something that has not been the focus of the Afghan government, specifically over the last seven or eight years.

I mean, some of the things we're seeing right now in terms of this conflict and the challenge is really a very comprehensive addressal of all aspects of it. So yes, I've got -- and -- changed ROE that allows me to do this, but that's just part of the counter- narcotics strategy. Because...

(CROSSTALK)

KING: I'm sorry to interrupt, but if this has happened under President Karzai, do you have any reason to believe that if he's reelected, that that will go down?

MULLEN: Well, I think it's clearly something we're going to have to keep a very close eye on and move in that direction.

There's an agricultural strategy that goes across this, where they grow it. It wasn't -- it was a few decades ago, but -- that Afghanistan actually produced enough food for itself, it exported food in this very rich agricultural valley.

Now, we've got to, I think, across our government and theirs focus on creating the infrastructure which allows them to produce the kind of products that they used to produce agriculturally. KING: I want to look now, here is a glimpse at the U.S. troop levels in Afghanistan. 62,000 now, and most expect, although you say the review is not complete, that number to keep going up. Ambassador, I want you to come in on this point here. 62,000 U.S. troops, about 35,000 from other nations, those NATO allies. Many of the NATO allies invested a modest number of troops to provide security through the elections.

Mr. Ambassador, define through the elections. Are some of these 35,000 now going to leave that the elections are over?

Or do you have commitments for them to stay through final results?

EIKENBERRY: John, they are committed. We'll know on the 17th of September, that's the target date, at least for the independent electoral commission of Afghanistan, Afghanistan-led, to give the final announcements on the election. If no candidate achieves 50 percent, then there'll be a runoff among the top two contenders, and we would expect that that election will occur then perhaps six weeks later or about four weeks later in mid-October.

So we could have a four to six weeks delay here in the whole process if we do go to a runoff. But we have commitments from the forces that are here to stay on if needed for a runoff.

KING: For a runoff. Would you like more NATO forces, sir? And just how deep is your frustration that our allies, given the increasing challenge, will not commit more? To you, Mr. Ambassador?

EIKENBERRY: John, that was for me?

KING: Yes, sir.

EIKENBERRY: John, the commitment that we've got from our NATO allies here is pretty extraordinary. We've got, as you had pointed out, 100,000 troops on the ground; about 40,000 of those are non-U.S. They're from 40 different countries, 40 plus different countries, from all the countries of NATO. This is the most ambitious, the most difficult mission that NATO in its 60-year history has ever conducted.

And so, yes, we're hoping for more progress with our allies, but if we look at where this alliance was 10 years ago and where they are today, far from Europe, inside of Afghanistan, I think we have to take stock of the extraordinary commitments that our European and Canadian allies have made. KING: We are running short on time, but Admiral Mullen, a couple quick questions for you in closing. Here's the U.S. troop level in Iraq, down now to in the mid-120,000. We were at about 140,000 at the beginning of the year. Horrific violence this past week. Many saying just what was to be expected. They knew the U.S. troops were coming out, that the insurgents, those who want to commit violence, waited.

Are you concerned about what's happening in the context of the Iraqi response and to whether you'll be able to keep this timeline to keep pulling U.S. troops out? MULLEN: Extremely concerned by the incidents last week. I think everybody was, and the key is whether this is an indicator of future sectarian violence. And certainly, many of us believe that one way that this can come unwound is through sectarian violence.

Our leadership's focussed on it. I know the leadership in politically and militarily in Iraq is very focussed on that. We've got also a little longer-term focus through the elections in January, and then after that, you know, that slope that you see there on the right-hand side of your graph is going to continue pretty dramatically between March and August of next year. The message is that the Iraqi leadership really has to take control and ensure...

KING: Is there a risk -- is there a risk this stops?

MULLEN: There's always a risk. We have not seen a lot of this really until last week. And we've seen some positive signs up north, where possibilities existed before, but it's something we're all very, very mindful of and watching very carefully. Not just us from here, but our troops on the ground there as well.

KING: I want to ask you lastly, sir, your impressions, reactions. The Scottish court released the gentleman who was convicted of the Lockerbie bombing. He has gone back to Libya. There was a hero's welcome on the ground in Libya despite a very strong message from the United States -- one, that they did not want him released, and two, that he should be put under house arrest in Libya.

The FBI director says Libya is now -- that decision gives comfort to the terrorists, and obviously you saw the reaction in Libya.

There are proposed military sales to Libya on the table. As the gentleman who has to sign the orders sending men and women into combat around the world, what signal did the court send?

And what have you seen out of Libya?

MULLEN: Well, this is obviously a political decision, which is out of my lane. But I mean, just personally, I was appalled by the decision.

KING: And if there are proposed Pentagon sales to Libya on the table, you'll say no?

MULLEN: Well, we'll deal with those down the road. It's just where I am right now.

KING: All right, Admiral, I understand the restrictions you're under there. I can tell by your face you'd like to say something a bit stronger.

Admiral Mike Mullen, Ambassador Karl Eikenberry, thank you very much.

And up next, three U.S. senators from across the ideological spectrum debate whether to send more troops to Afghanistan and whether Congress hears your concerns about proposed health care changes. Stay with us.

(COMMERCIAL BREAK)

KING: President Obama says the war in Afghanistan is not one of choice, but of necessity. Still, some in Congress are concerned that there's no end game for the U.S. military mission.

Let's talk it over with the ranking Republican on the Senate Foreign Relations Committee, Richard Lugar of Indiana, Armed Services Committee member and independent Senator Joe Lieberman of Connecticut, and Democratic Senator Benjamin Cardin of Maryland, a member of the Foreign Relations Committee.

Gentlemen, welcome. I want to get to Afghanistan in a minute, but I want to start where I ended with Admiral Mullen. Your reaction, the three of you involved so much in our international policy, to what happened, the Scottish court first releasing the gentleman convicted of the Lockerbie bombing.

And then we can show our viewers, I hope, the hero's welcome he received back in Libya after a direct message from the United States to put him under house arrest and to not do just this.

Senator Lugar, what should the United States do now in the context of, A, relations with Libya which had improved and, in fact, on the table were some proposed military sales.

LUGAR: Well, I think we ought to continue our relations with Libya, but we ought to condemn as strongly as possible this release. I think the president has indicated he felt it was obnoxious, I would certainly concur with that.

But I think it's very important to notice that the President Gadhafi has a constituency in Libya, which I suppose he was appealing. And the rest of the world is now engaged in diplomatic relations with Libya.

KING: You were there, sir...

LIEBERMAN: Yes.

KING: ... on a congressional delegation. And you delivered this same message. That you hoped he was not released, but if he was, there should not be that welcome. What should the consequences be?

LIEBERMAN: That's absolutely right. That's exactly what we said to Colonel Gadhafi. He obviously didn't get the message that he believed that Al Megrahi was convicted politically.

But the fact is he was convicted in a court of law according to the rule of law. This release -- the Scottish justice secretary committed an act of gross injustice here. The suggestions that have followed both from Libya, Gadhafi himself, his son Saif, and from the head of the British Libyan Business Council, that there was an intermixing here of Megrahi's fate with British interest in oil exploration in Libya, are shocking. I don't want to believe that they are true, but they are hanging so heavily in the air that I hope that our friends in Britain will convene an independent investigation of this action by the Scottish justice minister to release a mass murder.

With regard to Libya, we warned respectfully at that point, because we hoped Colonel Gadhafi would get our message that he could not expect relations with the United States, which have been good since after the Iraq War of 2003.

He has destroyed his WMD. He is cooperating in counterterrorism with us. But he could not expect them to go on normally if Megrahi was not only released, but greeted as a hero. And that has happened. So I would say suspension of arms sales, don't expect President Obama to meet Gadhafi at the U.N. General Assembly in New York in September.

This is a real setback for the anti-terrorist cause and takes our relations with Libya back to where they were for too long, a bad place.

KING: Do you agree with that assessment vis-a-vis Libya? And what do you believe was the motivation of releasing? Is it a humanitarian gesture, he has terminal cancer? Or do you believe there is something more suspicious?

CARDIN: Well, first, I think there should be consequences to those actions. So the terrorist showed no compassion for his victims. And to give him a compassionate release was wrong.

I think we also have to realize what impact this has on our war against terror. Here you see a terrorist being released after serving just eight years, a mass murder. I think it's very serious and I think there should be consequences.

KING: And in terms of the motivation of the Scottish court? Do you share his questioning?

CARDIN: I think Senator Lieberman raises a very valid point. I think we need to know what this oil deal was all about and whether there was a compromise to the judicial system for commercial gain.

KING: All right. Let's move on to Afghanistan and I want to ask a threshold question first, because we all lived through the Iraq debate. From a policy standpoint and from a political standpoint, it got pretty ugly here in the United States.

And, Senator Lugar, starting with you, has the president laid out to the American people a clear statement of the mission? Now, where we're going, and what the end game is?

LUGAR: In Afghanistan, is that a question?

KING: Yes.

LUGAR: No. And I think everyone waits for General McChrystal to give, really, the outline of where we're headed, how many troops or whatever else is going to be required, and of course, as time goes by, the debate goes on.

The Washington Post had polling that indicated that a large number of Americans are losing faith in the mission. A majority of Democrats do not really favor continuing very strongly. Republicans still in favor of it. So I hope we don't get into a partisan battle of that variety.

I think the president really has to face the fact that his own leadership here is critical. He really can't just leave this to the Congress, to General McChrystal, and say, folks, sort of, discuss this, after the report comes in.

KING: Well, let me bring in Senator Cardin on that point. As the Democrat of the group here, 70 percent in that poll, Senator Lugar just referred to in The Washington Post poll, 70 percent of Democrats say this is a fight not worth fighting.

If General McChrystal says, I need more troops, will you vote for them?

CARDIN: Well, first, I think we have to see what he says. Clearly the president is defining our mission to go after the terrorists. There's a lot of problems in Afghanistan. We didn't choose this war; they attacked us. We need to make sure that Afghanistan and, quite frankly, the border with Pakistan is not a safe haven for terrorists.

That should be our objective. And we now need to know what do we need to do as far as resources to accomplish that mission?

KING: You were there and you met with the ambassador and you met with the general on this same international trip with Senator Collins, Senator McCain, Senator Graham. How many more troops is he going to need, sir?

LIEBERMAN: That we didn't talk about in detail. But it's very clear that General McChrystal is going to ask for more troops.

Incidentally, I think, John, that President Obama has been strong and clear in Afghanistan. Obviously there has been a lot else going on in Washington and in American politics.

The recession, health care reform, et cetera, but the president came in and basically recommitted to what he had said during the campaign last year, that this was a war of necessity. That we were struck from Afghanistan when the Taliban was in charge on 9/11 '01. We can't let the Taliban come back. This is as if we were in the end of the Second World War, democracy was beginning to take route in Germany and the Nazis started an offensive to take the country back. That's what the Taliban is doing.

So, right now, the president has put a new team in charge, and they're good. General McChrystal, Ambassador Eikenberry, he's committed to 21,000 more troops. They're beginning to arrive. They're making a difference, those marines, in southern Afghanistan under General Larry Nicholson, doing a great job in turning the tide. KING: Do you see any political pressure on General McChrystal to ratchet down those numbers, to not ask for a significant number of more troops?

LIEBERMAN: I haven't seen any. I sure hope there's not. If there's a lesson we should've learned from Iraq, some of the pressure that was put on our generals there not to ask for what they thought they needed to win meant that we lost a lot of lives, spent a lot of money. My own opinion coming back from Afghanistan with a new team, new strategy, we ought to take the option that General McChrystal gives us that has the least risk.

In other words, don't dribble it out, don't go for incrementalism. That's a lesson we learned in Iraq.

Frankly, it's a lesson we learned a long time ago in Vietnam that give our troops and our civilians there, State Department, economic assistance, people, the support that they need as quickly as we can get it to them, and then demand that the Afghan government do the same, raise the number of security forces that they have in the battle and produce a good government for their people.

KING: I want to move on domestic issues. Senator Lugar, lastly, on the international, how long -- how long do the American people need to be prepared for significant U.S. troop presence in Afghanistan?

LUGAR: Well, that's the question the president will have to try to define much better, the political guidance of why Afghanistan should be reformed and how long we stay with it is a presidential, and it's likely to last many, many years beyond this particular term.

KING: Many, many years, a sober assessment. Up next, we'll shift to the domestic issue here at home, health care. Can lawmakers on Capitol Hill come to an agreement on reform? Or is it too late for bipartisanship? Stay with us.

Let's move on to an easier issue, right, health care? I want to ask the question first in the context of what we learned at the end of the week. The administration's mid-session budget review is late this year, but they now say the deficit over the 10-year period to come will be at $9 trillion, $9 trillion with a "T" dollars, that's up from a $7 trillion estimate a few months back when they released their budget in February.

Senator Lieberman to you first, in that context, with a bigger deficit, is it time for the president to hit the reset button? Forget sweeping health care reform this year, do three or four incremental things that are less costly, prove that you're bringing the cost curve down and then go after the more difficult and more expensive issues? LIEBERMAN: In a word, yes. I don't think -- I give the president tremendous credit for taking on the health care problem. And it really is a problem that we've got to deal with. But he took it on at a very difficult time that was not of his making.

In other words, we're in a recession. People are very worried about their jobs, about the economic future. They've watched us add to the debt of this country. We're projected to run a $1.8 trillion deficit this year, September 30th, more than $1 trillion next year. You mentioned the 10-year numbers. People are nervous, I think the protests coming out at the public meetings around the country this month are as much to do with that larger environment as they are with questions about health care reform. So I'd like -- I think great changes in our country often have come in steps. The civil rights movement occurred -- changes occurred in steps. Let's focus now on how to reduce costs. That's been a central theme of the president.

Let's talk about how to change the way health care is delivered. Let's talk about protecting people from not getting insurance because of preexisting illness. Let's take off the caps on the amount of insurance coverage you can get over the years. Let's pay for preventive services for health from the first dollar. Here's the tough one. We morally, every one of us, would like to cover every American with health insurance. But that's where you spend most of the $1 trillion plus, a little less that is estimated, the estimate said this health care plan will cost.

And I'm afraid we've got to think about putting a lot of that off until the economy's out of recession. There's no reason we have to do it all now, but we do have to get started. And I think the place to start is cost health delivery reform and insurance market reforms.

KING: Would there be a revolt in the Democratic Party, especially in the House? You served in the House before you came over to the Senate. You know the fever there, the fever pitch to get this done now. They believe they have the political opportunity. They believe, as Senator Lieberman said, there's a moral imperative.

Could the president say, time-out, we're going to start over, go incrementally steps in health care reform, and not have a revolt in this party?

CARDIN: Well, let me just give you three numbers: six, 12, 23. Ten years ago we were spending $6,000 for a family health insurance policy. Today it's $12,000. By 2016, it will be $23,000.

Today, of that $12,000, $1,000 -- or a little over $1,000 represents what a person who is insured pays for people who are not insured through their health insurance premiums. We need to deal with health insurance.

KING: The whole thing?

CARDIN: We've got to make sure we bring down the costs, Senator Lieberman is absolutely right. We have to have affordable, quality insurance available for everyone in our country. We've got to bring down the cost of health care. It's difficult to do that by ignoring those who don't have health insurance.

KING: If your choice is, though, go for the whole loaf and possibly fail, not have the votes for it, or go for pieces and then come back down the road, would you say, throw deep or take it in pieces?

CARDIN: What we need to achieve is bringing down the growth rate of health care costs and making sure that there's affordable quality health insurance available for every American. That's our objective. Now, we can define how we get there. I think Senator Lieberman raises some critical points. We have to deal with preventive health care. We have to deal with health insurance reform to make sure that you can get private insurance, it doesn't discriminate against you because of pre-existing conditions or cancel your policies or put arbitrary limits on it. That's a very important part of health care reform.

KING: Is the political reality -- and I want to bring the Republican voice into the conversation, but before I do, is the political reality -- we showed one of your town halls on the program last week getting a little feisty out there. Is the political reality, despite what you want, sir, that the president is going to have to compromise significantly? CARDIN: Well, you're going to have to compromise, that's part of the political process. But as long as we achieve bringing down the cost of health care and everyone has access...

KING: Is the public option going to be one of those compromises...

(CROSSTALK)

CARDIN: I think the public option is important. I think it's important because you need to have an affordable option available for people. In my state of Maryland today, if you have private insurance, 71 percent are in two insurance companies. One out of every three people in Maryland who have private insurance have no choice today. We've got to offer choice to bring down cost.

KING: Senator Lugar, some Republicans are gleeful at this situation. The president is back on his heels, he is losing support on the economy and on health care, and some of them say, just let it go, let the Democrats have this fight amongst themselves trying to figure out what to work. What would you do right now as an elder Republican statesman?

LUGAR: I would advise the president that the -- bringing up of the health care situation in the midst of recession, the unemployment problems that Senator Lieberman described, was a mistake. And therefore he ought to postpone the decision because even as you try to get to Senator Cardin's ideas of how you get reduced costs and what have you, you get back into the philosophical dispositions of various members, they don't lead to compromise at all.

When I was six days in southern Indiana, I found people were not talking about health care, although town hall meetings were occurring, they were very dramatic. It's jobs, jobs, the fear of unemployment, the fear of all sorts of bad things happening to your family.

It's the economic malaise now this president has to concentrate on and he'll get support doing that, even as he'll have support with the foreign policy situations. But not given out the way the health care thing came out. And you can always go back and forth, should he have had a plan as opposed to just throwing it up for grabs to the Congress, or should he have done this or that? Too late for that. For the moment, let's clear the deck and try it again next year or in subsequent times.

KING: Is there any -- the big choice the Democrats will face when they come back is whether to use reconciliation, which is a process most Americans are saying, where did that word come from? To do this through the budget process with 51 votes instead of the traditional 60 votes you would need to get something through in the Senate. You vote with the Democrats in caucus even though you're an independent now. Would you support that or would you tell leader Harry Reid, no way no how, can't do this on something as big as health care? LIEBERMAN: I think it's a real mistake to try to jam through the total health insurance reform, health care reform plan that the public is either opposed to or of very, very passionate mixed minds about. It's just not good for the system, frankly, it won't be good for the Obama presidency.

I think we -- because he has got other fights to fight. He has got climate change next domestically. He has got financial regulatory reform. He has got the war in Afghanistan.

You know, people on the Finance Committee, which I think remains our great hope now, these six people, three Democrats, three Republicans working together. That's the hope to get things done. They've said to me that they agree on about three-quarters of what needs to be done. Let's do the three-quarters and save the other quarter for a day when the economy is growing and maybe we've done something to turn down the deficit.

KING: We're about out of time. So I'm going to close on a lighter note. A question to Senator Lieberman. In the latest issue of "Playboy" magazine...

LIEBERMAN: Oh no.

KING: ... Alec Baldwin, Alec Baldwin is quoted as saying, "Maybe I'll move to Connecticut, I'd love to run against Joe Lieberman, I have no use for him." You're not up for three years, do you want to run against Alec Baldwin? You had a good one last time.

LIEBERMAN: Yes. Well, first, let me say, when you started with the "Playboy" reference, I'm glad you ended with Alec Baldwin and not one of the centerfolds.

(LAUGHTER)

LIEBERMAN: Second, you know, make my day. I mean...

(LAUGHTER) LIEBERMAN: You know, I mean, I must say that I respect Alec Baldwin as an actor and as a comedian, and if he wants to run, that's his right.

KING: We'll host a debate right here on STATE OF THE UNION.

Senators Lieberman, Lugar, and Cardin, thanks for coming in today.

(COMMERCIAL BREAK)

KING: He says it may be time to push the reset button on health care reform. Democratic Congressman Emanuel Cleaver of Missouri gets "The Last Word," next.

(COMMERCIAL BREAK)

KING: Sixteen newsmakers, analysts and reporters were out on the Sunday morning talk shows today, but only one gets the last word. That honor this day goes to Democratic Congressman Emanuel Cleaver of the Kansas City area in Missouri.

Congressman, thanks for joining us on "State of the Union."

CLEAVER: Good to be with you.

KING: You said, this past week, that it might be time to hit the reset button in the health care reform debate because of the anxiety out there in the country.

Does the reset button, sir, in your view, include taking one of the most controversial aspects, the public option, a government-run health care plan to be an alternative private health insurance -- taking that off the table?

Do you believe that needs to be done?

CLEAVER: No. If we take the public option off the table, we don't have health care reform. I think we need to push the reset button to begin the discussion over.

We are arguing over things that don't matter, death panels and whether or not black Americans will be able to go to non-black physicians, things that are completely ridiculous.

And I think we need to accept the fact, even those of us who are progressive -- I'm in the progressive caucus -- and realize that many Americans raise questions, and some of them are valid.

I think the whole issue about how we're going to pay for this is something that we need to spend more time on. And if we set the reset button and go back and try to have a civil discourse, I think it will serve the nation better, and ultimately we may be able to get health care approved.

KING: So you say a rhetorical reset, then, more than a policy reset.

I want to come in -- Senator Joe Lieberman was on the program earlier. He's a Democrat turned independent, and he said, because of the rising deficit numbers, because of the anxiety out there in the country and declining public support, that he believes the president should put off, temporarily, the goal of universal coverage and get about insurance reforms and other steps and health care reform, and prove first to the American people that you can drive down health care costs.

Let's listen to Senator Lieberman.

(BEGIN VIDEO CLIP)

LIEBERMAN: And I'm afraid we've got to think about putting a lot of that off until the economy's out of recession. There's no reason we have to do it all now. But we do have to get started. And I think the way to -- the place to start is cost, health delivery reform and insurance market reforms.

(END VIDEO CLIP)

KING: What's wrong with his approach of incremental reform?

CLEAVER: Well, he's basing that on what's gone on in August, and to be sure, we have had an argumentative and audacious August, no question about it.

But I disagree that we put it -- we put it off to sometime in the future. I think we need to make haste slowly.

And by that I mean, we need to go back, erase some of the vagueness, or fill in the blanks where there's vagueness, and then begin the process of moving so that the American public understands that we're not going to abandon them because of this outrage that we heard in August. But we do it slow enough that we can bring them along.

I went to the airport three, four days ago, with one of my staffers, and one of my supporters followed me to the check-in point, asking me what was health care going to do for her?

She's a supporter, a Democrat. She's raising legitimate issues. And I think we've got to move slow enough to bring them along. But I think we don't move so slowly that the American public says, well, it's over; we've lost another battle. We've been trying to get this done since Teddy Roosevelt. And I think now is the time, but I think we make haste slowly.

KING: You were a mayor, sir, before you came to Congress. You have been a chief executive. You've said this about the president of the United States and the health care debate.

You say, "President Obama underestimated the freefall the nation had already taken in partisan hostility when he talked about bringing change to Washington. It has gotten worse. There is something at play here that is indescribable." As a former mayor, someone who has had to balance the books and lead the city through tough times, what else is the president underestimating? What is he doing wrong?

CLEAVER: Well, he's -- he's not doing anything wrong. In fact, he should be praised for being audacious enough to bring this contentious issue to the public. And I think that he has done a yeoman's job in trying to articulate what this health care bill will do.

I think, however that he -- well, I don't want to do a Mr. Bush, but he underestimated...

(LAUGHTER)

... the -- I think -- the partisan divide.

One of the greatest insults to democracy is the putrid partisanship that refuses to even accept facts. And so, as a result, I think the president underestimated the -- the fact that there would be some people in Congress who would rather deny him a victory than help the American public. And I think...

KING: So then -- so what should he do coming out of the break?

If the votes for the public option are not in the Senate, should he go down on principle and hold firm, or should he make a compromise that you would not like but might be forced to accept?

CLEAVER: Well, let's -- let me answer it this way. In 1965, Wilbur Mills and Gerald Ford, two members of the House of Representatives, developed a compromise on Medicare and Medicaid.

I think that there is the possibility that the president can work with some Republicans. And I think he works with the ones who are interested in trying to get something accomplished. And I think, if he can do that, then we can get this difficult issue across.

But I don't think that the progressive caucus, for example, of which I'm a member, will ever accept a health care plan that does not deal with the lack of competition between the health care companies.

We have 130 health care -- private health care plans in this country, and they -- and they essentially work together. And so we've got to have -- they either need to become competitive or compromise. And that is something that I think the president has to be immovable on.

KING: "The Last Word" today from Congressman Emanuel Cleaver in Kansas City.

KING: And up next, heading off to war for the second, third, sometimes the fourth time. We'll take you out to Fort Riley, Kansas, for an up-close look at the cycle of war and the strain it puts on military families.

(COMMERCIAL BREAK) KING: Our conversations throughout the hour have only reinforced the fact that U.S. military commitments in Iraq and Afghanistan will continue for some time, meaning more stress and risks for the men and women who serve.

In our "American Dispatch" this week, we wanted to give you, no matter your political views on these deployments, an up-close look at the personal toll of these so many deployments.

We went out to Fort Riley, Kansas. Look at this number, it's stunning, 1.95 million, that means almost 2 million Americans have gone to deploy in Iraq and Afghanistan in recent years. Nearly 2 million. And of them, 750,000, more than that number, have been deployed more than once, some of them three or four times.

Out at Fort Riley, we visited the home of the 1st Infantry Division, and sadly, 166 of its members have been lost in Iraq and Afghanistan. There is a monument to them on the base.

And while we were out at Fort Riley, plans were under way to welcome one unit home from Iraq, and to rotate another brigade into the war zone. In addition to the battlefield risk, the price of service includes another year of missed birthdays, anniversaries, and missed moments that can never be recovered.

(BEGIN VIDEOTAPE)

KING (voice-over): New combat gear can mean just one thing, another overseas deployment. For some in the 1st Infantry Division, third or fourth time they will ship out to the country they call "the sandbox."

For Master Sergeant John Verschage, a veteran of the first Gulf War 20 years ago, it will be the second Iraq deployment in four years. For his wife, Tricia, and their four children, the transition is under way.

TRICIA VERSCHAGE, MILITARY SPOUSE: It's really funny, we have this strange cycle in our house. Dad gets real clingy and the kids start distancing themselves, because they know, OK, he's leaving soon, so we have just got to start being very independent now, and he starts wanting to spend all of his time with them.

KING: Six-plus years of constant deployments have taught the families and the Army so many lessons. At Fort Riley's brand new training center, high-tech classes and battlefield simulations, including efforts to improve communication among Humvee convoys often targeted for deadly IED attacks.

Lessons too about the strain on military families, including cultural changes Fort Riley Community Services Director Cheryl Erickson says are aimed at removing any fears soldiers or families might have about seeking counseling or other help. Not too long ago...

CHERYL ERICKSON, DIR., ARMY COMMUNITY SERVICES: It would have been in your medical record, and maybe you would be afraid your command would know or a doctor would notify your command.

KING: But now...

ERICKSON: A soldier or family member can go in complete anonymity. I couldn't get those names. The commanding general couldn't get those names.

KING: More family support groups to help as soldiers deploy and as they return home. And more work for Army chaplains like Lieutenant Colonel David Waters, a family of three who will soon deploy again to Iraq himself.

LT. COL. DAVID WATERS, ARMY CHAPLAIN: It's an unnatural environment. We're meant to be together with our families, and it's not a natural thing to be apart.

KING: As the U.S. footprint in Iraq shrinks, the Army hoped to guarantee troops 30 months of what it calls "dwell time" between deployments. But the escalation in Afghanistan puts those plans in doubt, and means continued strain for military families.

WATERS: Having time to recover, to get be re-strengthened, to get strong again, refortified in your life, in your relationships, that's a big key. They're not going away, we don't see the deployments going away any time soon.

KING: The children pay the biggest price. Hannah (ph) Hurning is 4 years old. For half her life, Sergeant First Class Mark Hurning has been in Iraq.

(on camera): So what has he missed?

ANNA HURNING, HUSBAND IN IRAQ: Missed the first smiles, missed the first teeth, missed a lot of firsts.

KING (voice-over): Sergeant Hurning was in Iraq most of 2006, then home nearly two years. Then duty called again. HURNING: The hardest part was when he deployed the second time and Hannah (ph) was watching a movie about him and thought it was a window.

And we made a home video before he deployed of him reading books to her. And she did not understand that it's not a window and that dad is really not sitting behind the glass and would knock on the window and wanted dad to take her hand. I think that was the hardest.

She's 4. She doesn't understand why dad is gone. They talk on weekends, but for some reason, she doesn't feel the connection.

KING (on camera): What does she understand about coming home?

HURNING: She didn't, I guess, for a while. She couldn't understand how soon is soon. We made a paper chain of about how many days we have left, and every night before going to bed, she'll take a chain off, so that kind of gives her a visual for how long.

KING (voice-over): just a few links left. Sergeant Hurning is due home within days, others ready to take their turn or another turn in the Army's constant cycle of strain.

(END VIDEOTAPE)

KING: Our thanks to the families of Fort Riley for their service, most of all, and for their hospitality. We'll be here again next Sunday and every Sunday at 9:00 a.m. Eastern for the first and last word in Sunday talk.

Tune in tonight at 8:00 p.m. for another hour of STATE OF THE UNION. I'm John King in Washington. We'll see you next week. Have a great Sunday.